Nonperforming Loans Are Falling; Analysts Point to Broader Measure

MADRID—Spanish banks say a modest decline in bad loans in recent months marks a postcrisis turning point. But analysts warn that a more-comprehensive measure of the banks' health points to a longer road to recovery for lenders.

After a vicious real-estate bust and a deep recession, Spanish banks' nonperforming loans—cases in which borrowers have fallen behind or defaulted on payments—have edged down to 13.4% of total loans as of April from a record-high 13.6% in December, according to Spain's central bank.